Other effects of the Act Lawyer Manual

Effect of Act on implied warranties

Whenever there is a written warranty, implied warranties cannot be disclaimed or modified. They may be limited in duration to the duration of a warranty, provided the limitation is both reasonable and conscionable. Any disclaimer, modification, or limitation violating this rule is ineffective under federal or state law. The same is true when there is a sale of a service contract as part of the sales transaction, or within 90 days. If a service contract is sold to the buyer, no implied warranty can be disclaimed or modified. Therefore, if the sales contract includes any written warranty or a service contract, all implied warranties exist. 15 U.S.C. §2308.

The act prohibits breach of implied warranties. The Act provides a remedy for a consumer who is damaged by any breach of an implied warranty. This remedy is available under the Act even where no written warranty was provided. This is an important and often overlooked Magnuson-Moss provision. It provides a federal cause of action for breach of virtually any implied warranty, permitting the plaintiff to recover damages and attorneys fees. 

Requirements for "full" warranties

The Act provides a remedy for any breach of a written warranty. In addition, the Act requires that every warranty be labeled as full or limited. A warranty can be "full" without covering every product part, characteristic or component. If a written warranty meets the minimum standards in 15 U.S.C. §2304, as set forth below, it is a full warranty. Otherwise, it is a limited one. A warranty cannot be labeled as "FULL" unless, at a minimum, it complies with the following:

• It cannot restrict the warranty rights of a subsequent owner during its stated duration
• It must promise to remedy defects within a reasonable time without charge
• It cannot limit the duration of any implied warranty
• It cannot limit consequential damages unless such exclusion or limitation conspicuously appears on the face
• It must permit the consumer, after a reasonable number of attempts by the warrantor to remedy, to elect a refund or replacement of the defective product or part and
• It can require no duty of the consumer other than notification of the defect
• If the warrantor replaces a component part of a consumer product, such replacement must include installing the part in the product without charge

Prohibition of "tie-ins"

The Act prohibits a warrantor from tying the performance of a written or implied warranty to the buyer's use of a particular product or service. Example: It is unlawful for a car manufacturer to honor its implied or express warranty only if one of its dealers perform all maintenance and service work. 15 U.S.C. §2302(c).

Prohibited tie-ins include tying a warranty to the use of only authorized parts or a certified product, and giving a longer warranty for a product when purchased with a tie-in product.

Other prohibitions

There are some less important prohibitions and restrictions applicable to all written warranties.  First, the warrantor cannot grant itself the sole authority to determine a defect or nonconformity. Example: A warrantor cannot warrant a product against any defect in material or craft and then state that it alone shall determine what is and what is not a defect. 

Other prohibitions cover subjects such as warranty registration cards, warranty extensions during repair efforts, and advertising and labeling.